FTSE Stable After Weak Mining But Hopeful M&A

Weakness in mining shares has dragged down the market after recent rises, but technology company CSR is soaring on talk of a possible sale.

The company, whose chip designs are used in products such as mobile phones and bluetooth headsets, has jumped 141p or 25% to 716p following a report it was exploring a sale after being approached by several semiconductor companies.

Any deal could value it at around $3bn, said the Financial Times, which is nearly double its current market valuation. It was said to be in talks with a potential suitor, but so far there has been no confirmation. Analysts at Liberum said:

We have long held that CSR is the most likely take-out target under our coverage given its attractive end market exposure (smart cars, connected home, internet of things), significant tax assets ($110m deferred tax asset) and low tax rate thereafter (20%). There is a wave of M&A in the semiconductor space and premiums are going higher (IFX/IRF 50% premium, Cirrus/Wolfson – 74% premium).
Overall though the mood in the market is more subdued, with the FTSE 100 down 19.38 points at 6811.28. The mining sector has come under pressure following a fall in iron ore prices in China, a key consumer of metals.

So Rio Tinto is down 110.5p at £32.25 while Anglo American is 47p lower at £15.21 and BHP Billiton has lost 40.5p to £19.05.

But building supplies group CRH has climbed 27p to £14.25 after Credit Suisse raised its recommendation from underperform to outperform.

via The Guardian

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